Generally Accepted Accounting Principles and Substantive...

PRAIRIE TECHNOLOGY PARTNERS Planning Memo December 31, 2011 We have been retained as continuing auditors for Prairie Technology Partners (PTP) for the year ending December 31, 2011 Engagement Objectives * Provide our report on the examination of PTPs financial statements by February 5, with year-end fieldwork to begin January 14, 2012 * Issue our management letter comments by February 10, 2012 Preliminary Analytical Review Briefly describe the results of your analytical procedures. Print this memo as an outline, then compose your answers as attachments in your wordprocessor. Describe any unusual or unexpected relationships†¦show more content†¦We chose 5% for our basis because of the loan covenant. Study of Internal Control Briefly summarize the key facts you noted in your study of the five components of internal control and the rationale for the conclusions you made in the audit program concerning whether each component was adequately designed and implemented. The design and implementation and objectives of company controls are not adequate to meet the control objectives. The control environment control objective is ineffective. This control objective lacks a written policy on ethical conduct, is lacking oversight from the board of directors and audit committee, lacks a consistent style and philosophy from management, and lacks a strong commitment to competence. The risk assessment control objective is effective but lacks any antifraud program and controls. The information and communication control is ineffective. A virus has been detected and is affecting the files of the company. This control is lacking a strong IT department. The general controls financial reporting control objective is effective but is weak in detecting or preventing material misstatement. The monitoring control objective is ineffective; this control has need of an internal auditor. Summary of Team Meeting about RMM Including Fraud Conduct a team meeting and write a brief summary here including the date, who attended, what was discussed, and any conclusions drawn. Prior-Year Working Papers Last yearsShow MoreRelatedAudit Pl Keystone Computers1128 Words   |  5 PagesAudit Plan – Keystone Computers An external auditor reviews a company’s financial reporting processes to attest that the financial statements fairly and accurately represent operational results and conform to generally accepted accounting principles. The audit process provides a reasonable, verifiable basis for the auditors’ opinion regarding the financial statements. An audit plan describes the various procedures that will be used and the purpose of those procedures. While management is responsibleRead MoreAudit Program Design Part Ii - Acc546 Essay example1797 Words   |  8 Pagesdeveloped to design test of controls, substantive tests of transactions and analytical procedures. Anderson, Olds, and Watershed, LLP will be designing test of controls, substantive tests of transactions and analytical procedures for Apollo. This will allow our firm to better understand the internal controls within their company along with making sure the company is in compliance with the requirements of the Sarbanes-Oxley Act of 2002 and generally accepted accounting principles.   Sales amp;Read MoreThe Benefits of Independent Finanical Audit Stakeholders1795 Words   |  7 Pagescompanys financial statements and to form an opinion about the companys financial statements. Auditors also review the accounting records, systems and controls and then comment on their weaknesses in their audit report; this helps the business to strengthen their operations. Auditors also perform the role of providing statistical analysis on the clarity and effectiveness of the accounting policies that have been put in place by a company. (www.ask.com) The people that mainly benefit from an audit ofRead MoreWhat I Learned From An Audit Essay1277 Words   |  6 Pageseffective audit system is important for a company because it protects the company from management and financial issues that might destroy the business. Three main things I learned from this class is how to plan an audit program, perform tests of control and substantive tests of transaction, and ethical responsibilities of accountants and auditors. Audit plan Firstly, in an audit plan, an auditor should know how to monitor, analyze and access risks of the organization. Essentially, auditors gather informationRead MoreAudit Proposal1094 Words   |  5 Pagesaudit as well as the responsibilities of management. Financial Audit vs. IT Audit The primary objective of a financial statement audit is to ensure that an organization’s financial statements are presented in manner according to generally accepted accounting principles (GAAP). During an engagement, auditors of financial statements analyze a business entity’s internal control system to assess the degree to which it appears to be operating effectively. As an example, an internal control systemRead MoreFinance and Investment Cycle1386 Words   |  6 Pages B. Transaction: less frequent, large and complex C. Focus of control activities: authorization of transactions amp; compete of accounting personnel D. Focus of substantive procedures: understanding of the transactions, verifying amounts and calculations, ensuring presentation and disclosures II. Inherent risks E. Lease accounting 1. The classification of operating or capitalized lease is based on the assumption in ASC840 F. Loan covenants 2Read MoreClarified Statements On Auditing Standards1705 Words   |  7 Pages Also the International Auditing and Assurance Standards Board began working on clarifying the international auditing standards in 2003 and they went into effect in 2009. The purpose of the Clarity Project was to help CPA’s understanding of generally accepted auditing standards and complying with them and converged them with the international auditing standards. The Auditing Standards Board (ASB) redrafted the standards for clarity and reorganized all of the auditing sections (AU) into new one addingRead MoreThe Audit Report And Internal Control E1749 Words   |  7 Pages(Arens, Elder, Beasley, 2012). Our responsibility as an auditor is to conduct an audit in accordance with the Generally Accepted Auditing Standards and express an opinion on these statements based on the audit. Audit Scope The audit conducted by Team D Auditing was executed in accordance with standards set by Generally Accepted Accounting Principles (GAAP) and the Public Company Accounting Oversight Board (PCAOB) (Arens et al., 2012). The standards set by these two bodies require the team to arrangeRead MoreThe Us Surgucal Case837 Words   |  4 Pagesof the leased and loaned assets account that resulted from the improper accounting for asset retirements. There are various procedures that could be taken in to account that would, if properly implemented, would have detected the frauds that occurred within the companies. There are many control risks that should have been taking regarding inventory along with preliminary audit strategies for the inventory and substantive test to be done that would have raised many flags during the typical auditsRead MoreKudler Fine Foods Audit Processes974 Words   |  4 Pagesâ€Å"This fairness evaluation is conducted in the context of generally accepted accounting principles (GAAP) and requires application of generalized auditing standards† (Bargranoff, 2008). External audits will assess computer-base accounting systems. The purpose of the audit is to determine how the computerized system impacts Kudler’s financial statements. Substantive test will be done to ensure proficiency; and it will begin with a preliminary test. A risk assessment will be another objective of the audit